Do I Need Boat Insurance?
Courtesy of DiscoverBoating.com
It is best to have what is known as an “All Risk” policy, which will provide coverage for all types of losses except those specifically excluded. Typically exclusions apply to losses that are preventable which result from wear and tear, deterioration, corrosion, mold, rot, break down, ice or freezing, etc. It is always important to read your policy so you know exactly what is and isn’t covered.
The main purpose of insurance is to return you to the financial position you were in before the loss occurred. With a new boat, you’ll want to insure it for the price you paid for the boat, plus the cost of any additional electronics or equipment you added to the boat. For an older boat, you’ll want to insure it for the “market value” or the price you would likely receive if you were to sell the boat on the open market.
Different settlement terms state what you are entitled to receive if your boat is a total loss.
It depends on your policy. At Markel, for most causes of loss, your deductible is waived if your boat is determined to be a total loss.
If you have a $250 deductible, you pay for any loss up to this amount. Some policies include a Diminishing Deductible feature, which means for every consecutive year you go loss or accident free, your deductible is reduced until eventually you have no deductible.
Along with Watercraft Liability you should look for a policy that provides Medical Payments, Personal Effects, Uninsured Boater, Pollution, Wreck Removal, operation of non-owned Watercraft and Emergency Towing.Optional coverage may also be available for Fishing Equipment, Boat Lifts, Tournament Fee Reimbursement and your legal liability as a professional angler.
Most policies will allow anyone to operate your boat as long as you have given them permission. There are exceptions, especially with high-performance boats, so always read your policy.
If you have a lay-up provision in your policy and the weather stays nice late into the year or warms up early, before you use your boat read your policy or call your insurance agent or company. If you use your boat in a lay-up period you will not have coverage. In the Markel Boat program, there are no lay-up restrictions, so you may enjoy your boat late into the season or during an early Spring
Most companies and insurance agents will provide proof of coverage directly to your dealer or lender. It is always a good idea to get your coverage in place before your closing date.
Some companies like Markel offer optional fishing equipment coverage which provides coverage on a replacement cost basis. So if you happen to lose your favorite fishing rod on a windy day on the water, you would be covered!
Ask if Tournament Fee Reimbursement coverage is available. Some companies offer this coverage if you are unable to attend an event due to injury, damage to your boat or if the tow vehicle breaks down while on the way to the tournament.
Some guys get all the luck, they get to fish AND get paid for it! If you are being compensated for any sort of fishing activity, you need to look for a policy that permits this usage. If you are insured on a pleasure usage policy (“boating & fishing for fun policy”), coverage can be void while you are acting as a paid fisherman or guide. Markel offers very broad coverage for Professional Bass and Walleye fisherman for on and off boat activities.
Generally boats are considered to be 26 feet and smaller, and yachts are 27 feet and larger. Coverage is usually more tailored to the type of boat, where it is used and where it will be navigated.
It is best to have what is known as an “All Risk” policy, which will provide coverage for all types of losses except those specifically excluded. Typically exclusions apply to damages that are preventable and are typically caused by or result from wear and tear, deterioration, corrosion, mold, rot, break down, ice or freezing, etc. It is always important to read your policy.
You will want to look for a policy that includes Agreed Value hull coverage, meaning all parties agree on the value of the yacht so you know what you will receive in the event of a total loss. A true yacht policy also includes Replacement Cost (new for old) coverage on partial losses, with the exception of items which are subject to higher wear.
PROTECTION & INDEMNITY (P&I) insurance is the maritime term for liability coverage. Coverage is typically provided for wreck removal if ordered by legal authority, coverage if a paid captain or crew member is injured under Jones Act as well as coverage if you are operating a non-owned yacht.
Usually you should insure a new yacht, for the price you paid, plus the cost of any additional electronics or equipment you added. For an older yacht, you’ll want to insure it for the “market value” or the price you would likely receive if you were to sell the boat on the open market. The Market Value of a yacht is often determined by a marine survey.
A yacht policy usually carries a percentage of the insured value, for instance a 1 percent deductible means a boat insured for $100,000 would have a $1,000 deductible. Depending on where you live higher deductibles may be applicable for certain causes of loss. For instance, if you live in Florida or the Gulf a higher deductible may be applicable if damages are caused by a Tropical Depression, Tropical Storm or Hurricane.
You should look for a yacht policy that includes additional coverage for Medical Payments, Personal Effects, Uninsured Boater, Pollution, Wreck Removal and Emergency Towing. Yacht policies may also include automatic coverage for the tender and coverage to help pay the cost of hauling your boat from the water to protect it from an approaching hurricane.
This is coverage that primarily protects the lien holder's interest in your boat, paying off the balance owed but nothing more. If you breach the warranties in the policy, such as promising not to go outside your navigational limits, not to use your boat during the lay-up period, not to use your boat for anything but private pleasure, and you do NOT have this coverage and experience a loss, you don't get paid for that loss and neither does the lender. You could end up making payments on a boat you cannot use. This information provided by http://www.marinebankers.org
Content courtesy of Markel Insurance
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